Did anyone else do NOTHING with the £250 Child Trust Fund

[WarblingEttie]

I just left it where it was and need to find out where it is as DS turns 18 on December 🤔

What did everyone else do?

@Whycantibetangy

I would’ve preferred to get the cash upfront rather than locked away for yrs and yrs.

Be grateful you got it at all. It only existed for a very short period of time, and so relatively few people benefitted from it at all, yet we all have to pay through our taxes etc for others to benefit. There really should be laws so that these schemes are in place, by law, for a specified number of years, rather than the usual political trick of announcing new initiatives just to get the media publicity/popularity for the politician at the time, and then conveniently forgotten and withdrawn a short time later.

Yep, and that's why it attracted a lot of criticism at the time. It cost the country's taxpayers a fortune, for very little benefit (if any) for most people.

I know where ds's is. It is worth about £600. Unfortunately because he has a severe learning disability we/he will struggle to access it.

I add £30 per month and have done since DD was born. It’s worth about 8k now (she’s 15).

@Spikeyball Does your DS have a bank account and email address? If so, it should be no more difficult than NT young people.

We are in the same situation as our DS's matures in March but due to his SLD and his lack of competency, he has no concept of money whatsoever, along with no bank account in his own name (he does have an email address which I manage) we will have to apply for Power of Attorney and we are unable to do that until he is 18.

It's ridiculous really (although I understand why these safeguards are in place) as I am allowed to manage his PIP of which he gets the highest rates in both mobility and care components.

The DWP are happy to do this but we are completely unable to open him a bank account now at his age. You would think in this grey area between the ages of 16-18 there would be a system in place to resolve this issue without having to now wait until he is 18 then having to apply for POA.

As you so rightly say it's a struggle. As if life isn't difficult enough caring for a Neuro Diverse DC.🙄

Can you not open an online account like Monese? It's very simple

@WhosafraidofVirginiaWoolf my daughter has SLD and has a Lloyds current account with me as her appointee. I had to show her passport, DWP appointee latter and apply in person in a branch. They were the easiest bank to deal with.

You also won't be able to obtain POA if your son is not competent to understand the process and will need to obtain Court of Protection Deputyship. It can be for Health and welfare and/or financial. I have the health and welfare for my daughter.

I left my sons where it was. My son turned 18 inJanuary and he's left it there too!

No need to get abusive.
It is important to be accurate about this stuff because otherwise some people will think it is literally possible to get risk free tax free returns at 9% over base for 14 years, and thus will be more likely to fall prey to scammers offering such a thing.

My DS also has a Halifax kids monthly saver so I do know something about this account. He didn’t have it in 2008 so I don’t know if there was some kind of unbelievable 10% “special offer” that year. But the interest rate quickly fell to 6% for a while, then 4.5, then 4, 3.5 and now it’s at 2.5. Higher than base for the last 14 years but nowhere near 10% for most of it. But despite being the market leading account in terms of interest, the big catch has always been you can’t put in a lump sum, you can’t save more than £100 a month and you can’t roll up the money from year to year so you don’t get the benefits of compounding at this (relatively) high rate.

As a result, after 14 years of saving the max you are allowed to in this account, your total return from it would be 2.7%. And that is a nominal return, so taking into account inflation it’s a negative real return.

If there is a big balance now (I think you said £20k+) it is NOT because you turned the CTF £250 into £20k with an amazing savings rate which beat the stock market, it’s because you have put almost £20k of your own money into a savings account returning 2.7% nominal.

I think we need to be clear about this a) so others don’t feel bad they didn’t turn water into wine. and b) so people understand why long term
saving for kids in cash is a really bad strategy if you want to actually grow their money.

I’ll look up what a global equity tracker would have returned on £100 a month for 14 years tomorrow….

I have decided to increase the monthly contributions whilst stocks are relatively low. Dd's is with One Family which follows the FTSE100. She only has 3 years left before turning 18. The plan is to move it on to a stocks ISA if it not performing well once it matures. We have only been able to add to it off and on for various reasons. It currently has about 5k in there. Am I doing the right thing in the current market? Any advice would be great thanks

Not Rtft.

Put it in a CTF account, then in a Junior ISA. I've put £30 a month in it all DCs life. Now worth over £10k at 16.

I have RTFT parmesan but ended up skim reading as people were just being rude

Was hoping it would get back on track for people to share advice. Will do more research. Thanks

In case anyone’s interested…I looked up the numbers

£100 saved a month into cash at base rate* from Jan 2008 until now would return £18,340 (assuming no tax paid, although pre 2016 interest would have been paid net unless in a CTF, ISA or JISA)

£100 invested a month into a global equity index from Jan 2008 until now would have returned £41,854 after charges, again assuming a tax free wrapper.

*a few banks & BSes do offer headline better-than-base rates for non-ISA products but as discussed previously, the T&Cs (plus tax) mean the benefit of the headline rate is very limited.

14 years at £100 per month would be £16,800 invested.
3 months short would obviously mean £16,500 invested.

@Ziegfeld thanks for the figures. It is good to see it illustrated in concrete figures how much more equities generally do better than cash savings over the long term.

For perspective, the total amount of capital invested over the 14 year 19 month period (of 100 per month) would come up to about 17,800. Therefore, the interest earned from saving that capital in cash dripped in over almost 15 years is only 540, which is just 3% of the initial capital put in.

Contrast that with the return from global equities over 15 years for the same capital is 24,054, which is 135%, i.e. more than double, the initial capital put in.

Caveat: I defer to Ziegfeld on the figures who is clearly more proficient than my DIY efforts.

Totally agree.
My DS1 is 2010 and got £250, we have added a few pounds a month and GPs added some at birthdays. I didn't want DS2 2012 to miss out, so I opened a JISA and have been adding the same. His is doing better so I'm going to transfer DS1 CTF into the same building society's JISA.

There used to be cash upfront back in the CTF years as well. I got £190 maternity grant in 2010, all pregnant women did no matter whether rich or poor. That got scrapped the following year. TBF the government can't afford to give away money all the time.

Both my children were fortunate enough to receive the £250. We invested the money into a NatWest CTF and added £10 for the first 5 years then upped that to £100 a month for the remaining period. On my daughters 18th she got £14,500, it was a stocks and shares CTF so the value took a hit with covid. The full balance has transferred into Premium Bonds which will be used to invest £4,000 a year into a LISA (deposit for her first home) which will be topped up by the government by £1,000 every year.
Our sons CTF will mature in a few years and we will follow the same route. We will try and balance both accounts as best we can to ensure both child gets roughly the same amount.

My DC's due to mature in December is worth less now that when we opened it,

@buttercream2022 what did you put the 250 in?

How have peoples gone up so Much if never added, both mine got about £450 , well one due soon others year go

@healthadvice123 Dc’s has gone down considerably, £250 now just over £200.

@OrangePomander was yours in a stocks & shares CTF or in cash CTF? I cannot imagine a cash CTF would lose value. It would have to be a pretty bad S&S CTF to lose value over 18 years. Do you know what it was invested in?

What was the ctf that lost value orange? Never heard of that before. What was it invested in??

I never did anything with ours and they each have £900 roughly.

I wish I would have done more but I was young when the scheme came out and don't understand how to invest it. I wish I would have added to it too :(